QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly
Period Ended September 30, 2012

[_]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition
period from _______ to _______

Commission File Number: 000-50764

NexCore Healthcare Capital Corp

(Exact name of Registrant as specified in its
charter)

Delaware

20-0003432

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1621 18th Street, Suite 250

Denver, Colorado 80202

(Address of principal executive offices) (Zip
Code)

303-244-0700

(Registrant’s telephone number, including
area code)

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes [X] No [_]

Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange
Act.

Adjustments to reconcile consolidated net
income (loss) to net cash used in

operating activities:

Depreciation and amortization

127,325

80,601

Loss on disposal of real estate assets (1)

—

13,461

Gain on disposal of property and equipment

—

(966

)

Equity in earnings of unconsolidated affiliate

(463,488

)

—

Equity-based compensation expense

101,477

69,304

Operating distributions from unconsolidated affiliate

486,442

—

Changes in operating assets and liabilities:

Accounts receivable (1)

663,493

(398,714

)

Revenue in excess of billings

213,252

187,805

Prepaid expenses and deposits

(4,665

)

(3,639

)

Pre-development costs

25,624

(439,763

)

Accounts payable and accrued liabilities (1)

(1,158,297

)

(25,893

)

Deferred rent

58,039

89,712

Net cash provided by (used in) operating activities

566,061

(2,124,049

)

INVESTING ACTIVITIES:

Capital expenditures

(49,108

)

(285,373

)

Investment in unconsolidated joint venture

—

(754,524

)

Distributions from unconsolidated joint venture

734,657

—

Proceeds from disposal of real estate assets (1)

—

13,483

Proceeds from disposal of property and equipment

—

1,750

Change in restricted cash

—

1,006,342

Net cash provided by (used in) investing activities

685,549

(18,322

)

FINANCING ACTIVITIES:

Distributions to noncontrolling interests

(9,974

)

—

Net cash used in financing activities

(9,974

)

—

Net change in cash and cash equivalents

1,241,636

(2,142,371

)

Cash and cash equivalents, beginning of period

1,930,441

3,513,651

Cash and cash equivalents, end of period

$

3,172,077

$

1,371,280

Supplemental disclosure of cash flow information:

Cash paid for income taxes

$

—

$

—

Cash paid for interest

$

—

$

—

(1)

We transferred our interests in nine subsidiaries
holding real estate assets on March 25, 2011, as further described in Note 3 below, to CDA Fund, LLC (“CDA”), a subsidiary
of BOCO Investments, LLC (“BOCO”). In exchange, CDA assumed our related party senior notes with BOCO and GDBA Investments
LLLP (“GDBA”), as well as the credit facility with First-Citizens Bank & Trust Company (“First Citizens Bank”).
In addition, CDA assumed certain accrued liabilities of approximately $24,000 and accounts receivable of approximately $112,000
related to the assumed real estate assets. The transfer resulted in a loss of $13,461 for the nine months ended September 30, 2011.
The related party debt and the credit facility that were assumed by CDA were no longer obligations of ours as of March 25, 2011.
BOCO and GDBA are related parties. See the discussion of our related parties in Note 10.

The accompanying notes are an integral
part of these Condensed Consolidated Financial Statements.

NexCore Healthcare Capital Corp provides comprehensive
healthcare solutions to hospitals, healthcare systems and physician partners across the United States by providing a full spectrum
of strategic and operational consulting, development, acquisition, financing, leasing and asset and property management services
within the healthcare industry. We primarily focus on serving and advising our clients with planning and developing outpatient
service facilities that target operational efficiencies and lower the cost of delivering healthcare services. We have historically
been active in a wide range of healthcare project types, including medical office buildings, medical services buildings, outpatient
centers of excellence, freestanding emergency departments, wellness centers, and multi-specialty and single-specialty physician
group facilities. In addition, we have been leveraging our extensive network of healthcare industry relationships to focus on post-acute
care projects including skilled nursing, assisted living and rehabilitation facilities. Based upon regulatory healthcare initiatives
and the continual need to lower the cost of healthcare services, we believe that these will be high growth markets for the foreseeable
future. Our majority owned subsidiary, Nexcore Group LP, was formed in 2004.

As used herein, “the Company,” “we,”
“our” and “us” refer to NexCore Healthcare Capital Corp and its consolidated subsidiaries, except where
the context otherwise requires.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Information and Reclassifications

The accompanying unaudited Consolidated Financial
Statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and with the
instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do
not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management,
the accompanying unaudited Consolidated Financial Statements include all adjustments, consisting of normal recurring items, necessary
for their fair presentation in conformity with GAAP. Interim results are not necessarily indicative of results for a full year.
The information included in this Form 10-Q should be read in conjunction with our audited Consolidated Financial Statements as
of December 31, 2011 and related notes thereto as filed on Form 10-K on March 30, 2012. Certain items in our Consolidated Financial
Statements for the three and nine months ended September 30, 2011 have been reclassified to conform to the current presentation.

Basis of Presentation

The accompanying Consolidated Financial Statements
include the financial position, results of operations and cash flows of NexCore Healthcare Capital Corp and our consolidated subsidiaries.
The third-party equity interest in one consolidated subsidiary is reflected as a noncontrolling interest in the Consolidated Financial
Statements. We also have a noncontrolling partnership interest in one unconsolidated joint venture, which is accounted for under
the equity method. All significant intercompany amounts have been eliminated.

Principles of Consolidation

We consolidate entities deemed to be voting interest
entities if we own a majority of the voting interest. The equity method of accounting is used for investments in non-controlled
affiliates in which we are able to exercise significant influence but not control. We also consolidate any variable interest entities
(“VIEs”) in which we are determined to be the primary beneficiary. As of September 30, 2012 and December 31, 2011,
and for the three and nine months ended September 30, 2012 and 2011, no VIEs were consolidated. We provide for noncontrolling interests
in consolidated subsidiaries for which our ownership is less than 100%.

A VIE is an entity in which either (a) the equity
investment at risk is not sufficient to permit the entity to finance its own activities without additional financial support or
(b) the group of holders of the equity investment at risk lack certain characteristics of a controlling financial interest. The
primary beneficiary is the entity that has the ability to control those activities that most significantly impact the entity’s
economic performance and has the obligation to absorb a majority of the expected losses or the right to receive the majority of
the residual returns. We continually evaluate whether entities in which we have an interest are VIEs and whether we are the primary
beneficiary of any VIEs identified in our analysis.

Use of Estimates

The preparation of the Consolidated Financial
Statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and reported
amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value Measurements

Fair value is defined as the exit price or price
at which an asset (in its highest and best use) would be sold or a liability assumed by an informed market participant in a transaction
that is not distressed and is executed in the most advantageous market. Our fair value measurements are based on the assumptions
that market participants would use to price the asset or liability. As a basis for considering market participant assumptions in
fair value measurements, current guidance establishes that a fair value hierarchy exists that distinguishes between market participant
assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified
within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions based
on the best information available under the circumstances (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted)
in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar
assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices),
at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability that are typically based on management’s
own assumptions, as there is little, if any, related observable market activity. In instances where the determination of the fair
value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within
which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement
in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires
judgment, and considers factors specific to the asset or liability.

Our financial instruments include accounts receivable, accounts payable and accrued liabilities. The carrying values of these financial instruments
as of September 30, 2012 and December 31, 2011, respectively, are considered to be representative of their fair value due to the
short maturity of these instruments.

Cash and Cash Equivalents

We consider all highly liquid investments purchased
with an original maturity of three months or less to be cash equivalents. We continually monitor our positions with, and the credit
quality of, the financial institutions with which we invest.

Accounts Receivable

Accounts receivable consists of amounts due
from customers. We consider accounts more than 30 days old to be past due. We estimate our allowance for doubtful
accounts based on specific customer balance collection issues identified. For the three and nine months ended September 30,
2012, no bad debt expense was recorded. For the three months ended September 30, 2011, we recovered bad debt expense of
$1,629 which had been recorded earlier in 2011, and no bad debt expense was recorded for the nine months ended September 30,
2011. There was no allowance for doubtful accounts as of September 30, 2012 and December 31, 2011.

In accordance with GAAP, as set forth in the Accounting
Standards Codification (“ASC”), we have capitalized certain third-party costs related to prospective development projects
that we consider likely to proceed. If we subsequently determine that the project is no longer likely to proceed or such costs
are not recoverable, any related capitalized costs are expensed and recorded as “Direct costs of revenue” on the Consolidated
Statement of Operations. Upon commencement of the project, any related capitalized costs are submitted for reimbursement from the
owner of the project. These costs include, but are not limited to, legal fees, marketing costs, travel expenses, architectural
and engineering fees, due diligence expenses and other direct costs. We do not capitalize any internal costs as pre-development
costs.

Property and Equipment

Property and equipment are stated at cost less
accumulated depreciation or amortization. Depreciation is calculated using the straight-line method over the estimated useful lives
of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the shorter of the expected
life or term of the lease. Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major
renewals and betterments, which extend the useful lives of existing property and equipment, are capitalized and depreciated. Upon
retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts
and any resulting gain or loss is recognized in the Consolidated Statement of Operations.

Real Estate Held for Sale

All real estate held for sale as of December 31,
2010 was disposed of on March 25, 2011. See Note 3 for additional information.

Investment in Unconsolidated Affiliate

We account for our investment in unconsolidated
affiliate under the equity method because we exercise significant influence over, but do not control, this entity. Under the equity
method, this investment was initially recorded at cost and is subsequently adjusted to reflect our proportionate share of net earnings
or losses of the unconsolidated affiliate, distributions received, contributions made and certain other adjustments, as appropriate.
Such investment is included in “Investment in unconsolidated affiliate” in our Consolidated Balance Sheet. Distributions
from these investments that are related to earnings from operations are included as operating activities and distributions that
are related to capital transactions are included as investing activities in our Consolidated Statement of Cash Flows.

During the analysis of the investment, it was
determined that the unconsolidated affiliate was a VIE. We determined the affiliate was a VIE based on several factors, including
whether the affiliate’s total equity investment at risk upon inception was sufficient to finance the affiliate’s activities
without additional subordinated financial support. We made judgments regarding the sufficiency of the equity at risk based first
on a qualitative analysis, then a quantitative analysis. In a quantitative analysis, we incorporated various estimates, including
estimated future cash flows, asset hold periods and discount rates, as well as estimates of the probabilities of various scenarios
occurring. The determination of the appropriate accounting with respect to this VIE was based on the determination of the primary
beneficiary. We determined we were not the primary beneficiary of the VIE as we do not have the ability to control those activities
that most significantly impact the affiliate’s economic performance. As reconsideration events occur, we will reconsider
our determination of whether an entity is a VIE and who the primary beneficiary is to determine if there is a change in the original
determinations and will report such changes on a quarterly basis.

Revenue Recognition

Certain revenue arrangements require management
judgments and estimates. Development fees are recognized over the life of a development project on the percentage-of-completion
method where the circumstances are such that total profit can be estimated with reasonable accuracy and ultimate realization is
reasonably assured. The percentage-of-completion method uses actual hours spent internally on the project compared to the total
forecasted internal hours to be spent on the project as the best measure of progress. If estimates of total hours require adjustment,
the impact on revenue is recognized prospectively in the period of adjustment. As of September 30, 2012 and December 31, 2011,
we recorded an asset of $35,622 and $248,874, respectively, for revenue recognized in excess of billings which represents the
difference between actual billed revenue and the revenue recognized using the percentage-of-completion method.

We source tenants and negotiate leases for buildings
we manage and in return are paid leasing commissions and tenant consulting fees. This revenue is recognized based on each negotiated
contract with the building owner or development contract and is recognized accordingly per the contracts as services are performed
and certain development benchmarks are achieved, unless future contingencies exist.

Property and asset management fees are recognized
monthly as services are performed, unless future obligations exist. Investor advisory and other fees are typically recognized at
the culmination of a transaction such as a purchase or sale of a building.

Certain contractual arrangements for services
provide for the delivery of multiple services. We evaluate revenue recognition for each service to be rendered under these arrangements
using criteria according to GAAP regarding multiple-element arrangements. For services that meet the separability criteria, revenue
is recognized separately. For services that do not meet these criteria, revenue is recognized on a combined basis.

In addition, in regard to development service
contracts, the owner of the property will typically reimburse us for certain expenses that are incurred on behalf of the owner.
We base the treatment of reimbursable expenses for financial reporting purposes upon the fee structure of the underlying contract.
Contracts are accounted for on a net basis when the fee structure is comprised of at least two distinct elements, namely (i) a
fixed management fee and (ii) a separate component that allows for expenses to be billed directly to the client. When accounting
on a net basis, we include the fixed management fee in reported revenue and net the reimbursement against expenses. We base this
accounting on the following factors, which defines us as an agent rather than a principal:

The property owner, with ultimate approval rights relating to the expenditures
and bearing all of the economic costs of such expenditures, is determined to be the primary obligor in the arrangement;

Because the property owner is contractually obligated to fund all operating
costs of the property from existing cash flow or direct funding from its building operating account, we bear little or no credit
risk; and

We generally earn no margin on the reimbursement aspect of the arrangement,
obtaining reimbursement only for actual costs incurred.

All of our service contracts are accounted for
on a net basis.

Guaranties

A guarantor is required to recognize, at the inception
of a guaranty, a liability for the fair value of the obligation undertaken in issuing the guaranty. Management continually evaluates
guaranties made to determine if the guaranties meet the criteria required to record a liability. As of September 30, 2012 and December
31, 2011, respectively, our guaranties, referred to in Note 7, met the criteria to be recorded as liabilities; however, the amount
was de minimus and no value has been recorded.

Earnings Per Share

Basic income per share is computed by dividing
net income by the weighted average number of shares of common stock outstanding. Diluted income per share is determined by dividing
the net income by the sum of (1) the weighted average number of common shares outstanding and (2) if not anti-dilutive,
the effect of outstanding stock awards determined utilizing the treasury stock method.

The dilutive effect of the outstanding
stock awards for the three months ended September 30, 2012 was 2,389,396. Stock awards to purchase 1,315,683 shares of our
common stock (“Common Stock”) were excluded from the calculation of diluted income per share for the three months
ended September 30, 2012 because their inclusion would have been anti-dilutive. The dilutive effect of the outstanding stock
awards for the nine months ended September 30, 2012 was 2,367,042. Stock awards to purchase 1,247,380 shares of our Common
Stock were excluded from the calculation of diluted income per share for the nine months ended September 30, 2012 because
their inclusion would have been anti-dilutive.

There was no dilutive effect for the outstanding
stock awards for the three and nine months ended September 30, 2011, respectively, as we reported a net loss for both periods.

Noncontrolling interests are the portion of equity,
or net assets, in a subsidiary that are not attributable to the controlling interest. As of September 30, 2012 and December 31,
2011, respectively, we owned 90% of the consolidated partnership, NexCore Group LP. NexCore Partners Inc owns the remaining 10%,
which is classified as permanent equity in accordance with GAAP and is reflected as “Noncontrolling interests” in our
Consolidated Balance Sheets. NexCore Partners Inc is wholly owned by Gregory C. Venn, Peter K. Kloepfer and Robert D. Gross, our
Chief Executive Officer, Chief Investment Officer and Chief Operating Officer, respectively.

Income Taxes

Deferred income taxes are provided for under the
asset and liability method. Under this method, deferred tax assets, including those related to tax loss carry forwards and credits,
and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities
using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded
to reduce deferred tax assets when it is more likely than not that the net deferred tax asset will not be realized.

We follow Financial Accounting Standards Board
(“FASB”) issued guidance for accounting for uncertainty in income taxes, which clarifies the accounting and disclosure
for uncertainty in tax positions and seeks to reduce the diversity in practice associated with certain aspects of the recognition
and measurement related to accounting for income taxes. We have analyzed our various federal and state filing positions and consider
our positions more likely than not to be sustained upon examination by the applicable taxing authorities based on the technical
merits of the position.

Recently Adopted Accounting Pronouncements

In May 2011, the FASB issued Accounting Standards
Update No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs"
("ASU No. 2011-04"), which amends current guidance to result in common fair value measurement and disclosures between
accounting principles generally accepted in the United States and International Financial Reporting Standards. The amendments explain
how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards
or affect valuation practices outside of financial reporting. ASU No. 2011-04 clarifies the application of certain existing fair
value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable
inputs. The amendments in ASU No. 2011-04 are effective for interim and annual periods beginning after December 15, 2011. The adoption
of the provisions of ASU No. 2011-04 did not have a material impact on our Consolidated Financial Statements.

In June 2011, the FASB issued Accounting Standards
Update No. 2011-05, "Presentation of Comprehensive Income" ("ASU No. 2011-05"), which improves the comparability,
consistency, and transparency of financial reporting and increases the prominence of items reported in other comprehensive income
("OCI") by eliminating the option to present components of OCI as part of the statement of changes in stockholders' equity.
The amendments in this standard require that all nonowner changes in stockholders' equity be presented either in a single continuous
statement of comprehensive income or in two separate but consecutive statements. Subsequently in December 2011, the FASB issued
Accounting Standards Update No. 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications
of Items Out of Accumulated Other Comprehensive Income" ("ASU No. 2011-12"), which indefinitely defers the requirement
in ASU No. 2011-05 to present on the face of the financial statements reclassification adjustments for items that are reclassified
from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. The amendments
in these standards do not change the items that must be reported in OCI, when an item of OCI must be reclassified to net income,
or change the option for an entity to present components of OCI gross or net of the effect of income taxes. The amendments in ASU
No. 2011-05 and ASU No. 2011-12 are effective for interim and annual periods beginning after December 15, 2011 and are to be applied
retrospectively. The adoption of the provisions of ASU No. 2011-05 and ASU No. 2011-12 did not have a material impact on our Consolidated
Financial Statements.

NOTE 3. DISPOSITION OF REAL ESTATE ASSETS

As of December 31, 2010, we had nine non-medical
properties classified as real estate held for sale totaling $7,191,821. Pursuant to the reverse merger on September 29, 2010 (the
“Acquisition”) with CapTerra Financial Group, Inc. (“CapTerra”), it was determined that all non-medical
real estate assets, which were all related to the legacy CapTerra business, would be disposed of by us as the surviving entity
in order to continue to focus on healthcare real estate.

On March 25, 2011, we transferred our interests
in the nine subsidiaries holding these real estate assets to CDA, a subsidiary of BOCO, in exchange for assuming our related party
senior notes with BOCO and GDBA and the credit facility with First Citizens Bank. The transaction resulted in a loss of $13,461.
All debt assumed by CDA was no longer an obligation of ours as of March 25, 2011. CDA also assumed all future contingencies related
to this transaction.

NOTE 4. INVESTMENT IN UNCONSOLIDATED AFFILIATE

During September 2010, we entered into a joint
venture agreement with an institutional equity partner to develop various healthcare related real estate projects. We own
a 15% interest in the limited liability company through which the joint venture is being conducted (“Venture I”), which
was determined to be a VIE. We are the managing member in Venture I, but our rights as managing member are subject to the rights
of the institutional partner. We determined that we were not the primary beneficiary as we do not have the ability to control those
activities that most significantly impact the affiliate’s economic performance, and therefore, we account for this investment
under the equity method.

As of September 30, 2012, Venture I had one project
under development and two completed development projects. Our investment balances of $3,267,491 and $4,514,579 as of September
30, 2012 and December 31, 2011, respectively, represents cash we contributed to Venture I to fund our portion of these development
projects, adjusted by our share of results of operations and cash distributions. One completed development project began operations
during the fourth quarter of 2011 and the second completed development project began operations during the third quarter of 2012.
Our portion of the earnings and losses from Venture I are reflected in “Equity in earnings of unconsolidated affiliate”
in our Consolidated Statements of Operations. Additionally during the nine months ended September 30, 2012, a subsidiary of Venture
I refinanced its construction loan with longer-term debt and contemporaneously entered into an interest rate swap that qualifies
for hedge accounting as a cash flow hedge. Our portion of earnings or losses and comprehensive income or loss recognized represents
our share of operating returns after preferred return requirements are fulfilled.

The following table provides unaudited selected
financial information for our unconsolidated affiliate as of September 30, 2012 and December 31, 2011, and for the three and nine
months ended September 30, 2012 and 2011, respectively.

Balance Sheets

As of

September 30,

2012

As of

December 31, 2011

Real estate, net of accumulated depreciation

$

45,516,612

$

28,895,100

Construction in progress

11,107,711

7,433,859

Total assets

58,639,036

37,631,562

Debt

38,807,584

11,961,097

Total liabilities

40,601,609

13,371,217

Partner’s capital

17,099,978

24,107,320

Accumulated other comprehensive loss

489,477

—

Retained earnings

1,426,926

153,025

For the Three Months Ended September 30,

For the Nine Months Ended

September 30,

Statements of Operations

2012

2011

2012

2011

Rental revenues

$

1,621,478

$

—

$

4,258,036

$

—

Operating expenses

300,314

—

962,132

—

Depreciation expense

456,682

—

1,192,019

—

Interest expense

303,125

—

689,843

—

Net income

517,113

—

1,273,901

—

Fair value adjustment of cash flow hedge

(268,308

)

—

(489,477

)

—

Comprehensive income

248,805

—

784,424

—

In connection with these projects, we entered
into agreements with two lenders for the projects to guarantee completion of the buildings. Additionally, a related-party company
signed limited payment guaranty agreements with the lenders as detailed in Notes 7 and 10.

Compensated employee absences are recorded in
accordance with ASC Topic 710. Per our employment policy, unused and vested vacation hours are paid out to employees upon termination,
either voluntary or involuntary. Unused and vested sick hours are carried over to subsequent years, however are not paid out upon
termination.

NOTE 6. DEBT

BOCO Line of Credit

NexCore Group LP, our consolidated subsidiary,
had a revolving line of credit with BOCO which matured in July 2012. There was no outstanding balance on this line of credit as
of December 31, 2011.

NOTE 7. COMMITMENTS AND CONTINGENCIES

Guaranties

We executed project
completion guaranties with U.S. Bancorp (“US Bank”) and Wells Fargo Bank, N.A. (“Wells Fargo”) on
behalf of subsidiaries owned by our unconsolidated affiliate, Venture I, in connection with construction loans for three
development projects.The guaranty agreements unconditionally guarantee the banks that
the projects will be completed, all costs will be paid, and that each property will be free and clear of all liens prior to
the release of its specific guaranty. The first project was completed and refinanced and its completion guaranty was
released as of June 30, 2012. The second project was completed and operations commenced during the three months ended
September 30, 2012 and the third project under development was proceeding on schedule. We believe any liabilities associated
with these guaranties will be de minimus and therefore we have not recorded a corresponding liability on our Consolidated
Financial Statements.

Leases

We lease our primary office space and also lease
additional office space in two locations. Our primary office space lease started January 1, 2011 and expires December 31,
2017, and the two additional office space leases have terms of six months or less. In addition, we pay certain facility operating
costs as a portion of rent expense. During the first quarter of 2011, we commenced improvements to the Denver office and completed
these improvements during the second quarter of 2011. The landlord provided a $245,000 allowance for tenant improvements and a
rent abatement that is recognized on a straight-line basis over the life of the lease.

For the three and nine months ended September
30, 2012, the amount recorded as rent expense in “Selling, general and administrative” on the Consolidated Statements
of Operations was $61,181 and $181,682, respectively. For the three and nine months ended September 30, 2011, the amount recorded
as rent expense in “Selling, general and administrative” on the Consolidated Statements of Operations was $68,355 and
$201,231, respectively. The difference between the amount paid and the amount expensed is recorded as a deferred amount in “Deferred
rent and other liabilities” in the Consolidated Balance Sheets. As of September 30, 2012 and December 31, 2011, those amounts
were $381,869 and $325,508, respectively.

Future minimum lease payments under these operating
leases are as follows:

Year:

Amount

Remainder of 2012

$

70,825

2013

256,950

2014

271,553

2015

277,587

2016

289,656

Remaining

301,725

Total minimum lease payments

$

1,468,296

Contingent Consideration

Pursuant to the Acquisition, we are required
to have a specified amount of net operating loss carryforwards (“NOLs”) that are not subject to limitation or
restriction under Section 382(a) of the Internal Revenue Code for state and Federal income tax purposes which will be
available for use during the period from the date of the Acquisition through January 1, 2014. If the NOLs become subject to
limitation under Section 382(a), we will be required to issue up to an additional 8,000,000 shares of Common Stock (the
“NOL Shares”) to the seller. If required, the NOL Shares will be issued to each former NexCore Group LP
partner in proportion to the amount of shares such partner received pursuant to the Acquisition. The determination of our
NOLs will be based on our Federal income tax return for the year ending December 31, 2013. As of September 30, 2012, we
do not consider the issuance of the NOL Shares to be probable. As such, we did not record any contingent consideration for
possible issuance of these shares as of September 30, 2012 or December 31, 2011.

NOTE 8. STOCKHOLDERS’ EQUITY

Common Stock

As of September
30, 2012, we had 200,000,000 shares of Common Stock authorized, of which 49,455,841 shares were outstanding
as of September 30, 2012 and December 31, 2011, respectively. As of September 30, 2012, 48,628,781 shares of Common Stock were subject to various trading restrictions implemented
in connection with the Acquisition. These trading restrictions prohibited any sales or other dispositions of shares on or before
September 29, 2012. Thereafter these trading restrictions permit sales of shares in limited amounts, provided that no such sale
may be made at a price less than $2.00 per share (subject to equitable adjustment for any stock dividend, stock split, combination
or other applicable recapitalization event) unless otherwise unanimously agreed to by our stockholders who are subject to the trading
restrictions. All of these trading restrictions expire on September 29, 2014.

Additionally, our board of directors has the authority
to authorize the issuance of up to 5,000,000 shares of preferred stock of any class or series. The rights and terms of such preferred
stock will be determined by our board of directors. No shares of preferred stock were outstanding as of September 30, 2012 and
December 31, 2011, respectively.

No shares of Common
Stock were issued during the three and nine months ended September 30, 2012.

NOTE 9. EQUITY-BASED COMPENSATION

Stock Options

We may grant
options to purchase our Common Stock to certain employees and directors pursuant to our Amended and Restated 2008 Equity
Compensation Plan (the “Plan”). There were no options granted during the three months ended September
30, 2012. During the nine months ended September, 2012, we canceled 750,000 options and
granted 1,278,000 options at an exercise price of $0.16 per share vesting over approximately three years, with a fair value
of $0.01 per share. As part of the 1,278,000 options granted, the 750,000 options that were canceled were reissued. This was
accounted for as a modification of terms and a modification penalty of approximately $3,200 was added to the total
equity-based compensation expense to be amortized. All options issued under the Plan were
valued using the Black-Scholes option pricing model. The table below sets forth the assumptions used in valuing such
options.

Equity-based compensation expense related to options
granted under the Plan is amortized on a straight-line basis over the service period during which the right to exercise such options
fully vests. For the three and nine months ended September 30, 2012, our equity-based compensation expense related to options was
$33,849 and $101,477, respectively, which was included in “Selling, general and administrative”
in our Consolidated Statements of Operations. For the three and nine months ended September 30, 2011, our equity-based compensation
expense related to options was $26,032 and $69,304, respectively, which was included in “Selling,
general and administrative” in our Consolidated Statements of Operations. As of September 30, 2012, $228,883 of such
expense remained unrecognized which reflects the unamortized portion of the value of such options issued pursuant to the Plan.
No options were exercised during the three and nine months ended September 30,
2012 or 2011.

NOTE 10. RELATED PARTIES

Revenue, Direct Costs of Revenue and Accounts
Receivable

Our main sources of income are fees and commissions
related to client consulting and advisory services, property development, management and leasing. Revenue, direct costs of revenue
and receivables associated with transactions with properties where certain of our officers have, or we have, an ownership interest
in, or can significantly influence decision-making on behalf of the property, are considered related-party transactions. The amounts
and balances related to these transactions for the periods presented are as follows:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Related party:

2012

2011

2012

2011

Revenue

$

2,000,916

$

758,396

$

3,824,844

$

2,390,883

Direct costs of revenue

94,579

139,732

294,921

377,967

September 30, 2012

December 31, 2011

Related party:

Accounts receivable

$

2,142,346

$

3,355,171

BOCO Investments, LLC

BOCO, a private investment company, provided financing
to our predecessor company, CapTerra, and continues to provide various financial services to us. Brian L. Klemsz, who serves on
our Board of Directors, is the Chief Investment Officer of BOCO.

NexCore Group LP, our consolidated subsidiary,
had a revolving line of credit with BOCO which matured in July 2012. There was no outstanding balance on this line of credit as
of December 31, 2011.

Transfer of Assets

As discussed in Note 3, on March 25, 2011,
we transferred our interests in nine subsidiaries holding non-medical real estate assets to CDA, a subsidiary of BOCO, in exchange
for CDA assuming our related party debt with BOCO and GDBA, and the credit facility with First Citizens Bank. The related party
debt that was assumed by CDA was no longer an obligation of ours as of March 25, 2011.

We executed project completion
guaranties with US Bank and Wells Fargo in connection with construction loans for three development projects that
subsidiaries of Venture I commenced in September 2010, June 2011 and November 2011. The guaranty agreements unconditionally
guarantee US Bank and Wells Fargo that the projects will be completed, all costs will be paid, and that each property will be
free and clear of all liens prior to the release of its specific guaranty. As of June 30,
2012, the guaranty was released on the first completed project and we believe any amounts associated with the remaining
guaranties will be de minimus and therefore we have not recorded a corresponding liability as of September 30, 2012.
Additionally, an entity owned by related parties executed limited payment guaranties with US Bank and Wells Fargo related to
those construction loans and the completion guaranties for which it will receive fees upon completion of the projects.
Gregory C. Venn, Peter K. Kloepfer and Robert D. Gross (our Chief Executive Officer, Chief Investment Officer and Chief
Operating Officer, respectively) have agreed, subject to certain limitations, to indemnify the related party entity if it is
required to make payment under these limited payment guaranties.

NexCore Partners Inc

As of September 30,
2012 and December 31, 2011, respectively, we owned 90% of the consolidated partnership, NexCore Group LP. NexCore Partners Inc
owns the remaining 10%, which is classified as permanent equity in accordance with GAAP and is reflected as “Noncontrolling
interests” in our Consolidated Balance Sheets. NexCore Partners Inc is wholly owned by Gregory C. Venn, Peter K. Kloepfer
and Robert D. Gross, our Chief Executive Officer, Chief Investment Officer and Chief Operating Officer, respectively.

NOTE 11. CONCENTRATIONS

Our leasing and property management revenue for
the three and nine months ended September 30, 2012 and September 30,
2011, respectively, was primarily generated through transactions with two institutional partners who own, directly or through affiliates,
a majority of the controlling interests of all but three of our managed healthcare properties. As of September
30, 2012, we managed 22 healthcare properties. Additionally, the development projects with Venture I accounted for $2,883,446,
or 48%, of our total revenue for the nine months ended September 30, 2012, and $1,745,136, or
42%, of our total revenue for the nine months ended September 30, 2011. As of September
30, 2012, the balance of accounts receivable from projects associated with Venture I was $1,701,053, or 59%, of our total
accounts receivable balance. As of December 31, 2011, the balance of accounts receivable from projects associated with Venture
I was $3,258,336, or 92%, of our total accounts receivable balance.

NOTE 12. SUBSEQUENT EVENTS

GAAP requires an entity to disclose events that occur after the
balance sheet date but before financial statements are issued or are available to be issued (“subsequent events”) as
well as the date through which an entity has evaluated subsequent events. There are two types of subsequent events. The first type
consists of events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet,
including the estimates inherent in the process of preparing financial statements (“recognized subsequent events”).
The second type consists of events that provide evidence about conditions that did not exist at the date of the balance sheet but
arose subsequent to that date (“nonrecognized subsequent events”).

There were no subsequent events required to be
disclosed for this Form 10-Q.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used herein “the Company,” “we,”
“our” and “us” refer to NexCore Healthcare Capital Corp and its consolidated subsidiaries, including NexCore
Group LP, a Delaware limited partnership, except where the context otherwise requires.

Forward-Looking Statements

We make statements in this Quarterly Report
on Form 10-Q that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, referred to as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, referred
to as the Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,”
“estimates,” “expects,” “intends,” “may,” “plans,” “projects,”
“seeks,” “should,” “will,” and variations of such words or similar expressions. We intend these
forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions.
These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects,
which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans,
intentions, expectations, strategies and prospects as reflected in or suggested by such forward-looking statements are reasonable,
we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual
results may differ materially from those described in the forward-looking statements and such results will be subject to a variety
of risks and uncertainties that may be beyond our control, including without limitation those discussed in the “Risk Factors”
section of our Annual Report on Form 10-K for the year ended December 31, 2011 filed on March 30, 2012.

We assume no obligation to update publicly
any forward-looking statements, whether as a result of new information, future events or otherwise. The reader should also carefully
review our financial statements and the notes thereto.

Overview

We provide comprehensive healthcare solutions
to hospitals, healthcare systems and physician partners across the United States by providing a full spectrum of strategic and
operational consulting, development, acquisition, financing, leasing and asset and property management services within the healthcare
industry. We primarily focus on serving and advising our clients with planning and developing outpatient service facilities that
target operational efficiencies and lower the cost of delivering healthcare services. We have historically been active in a wide
range of healthcare project types, including medical office buildings, medical services buildings, outpatient centers of excellence,
freestanding emergency departments, wellness centers and multi-specialty and single-specialty physician group facilities. In addition,
we have been leveraging our extensive network of healthcare industry relationships to focus on post-acute care projects including
skilled nursing, assisted living and rehabilitation facilities. Based upon regulatory healthcare initiatives and the continual
need to lower the cost of healthcare services, we believe that these will be high growth markets for the foreseeable future.

We have been recognized by Modern
Healthcare as one of the top healthcare real estate developers, and we have become one of the nation’s most active
and respected healthcare advisors. We and our principals have developed and acquired nearly 5.5 million square feet of
commercial real estate. As of September 30, 2012, we managed 22 healthcare facilities and one retail facility comprised of
approximately 1.7 million square feet, and had two construction projects under development comprised of approximately
0.1 million square feet. We and our principals have completed over $700 million of healthcare related real estate
transactions on behalf of our institutional investors.

Business Strategy

Our business strategy is focused on anticipating
the needs of our clients by providing innovative and flexible strategic planning solutions, targeting operational proficiencies
and creating optimal financing and real estate structures with nationally-competitive, institutional capital sources. Such services
assist healthcare service providers by lowering healthcare delivery costs and by providing efficient outpatient facilities. The
majority of our revenue is derived from investor and project advisory fees, consultancy and management fees, co-investment returns
and profit sharing interests. Any such profit sharing interests are usually recognized upon the occurrence of a monetization event
for the development projects in which we are co-invested, such as when a stabilized development project is sold to an institutional
investor. We plan to continue our strategy of selectively co-investing our capital with institutional partners and targeting profit
sharing interests when appropriate investment opportunities arise.

An increasing demand for healthcare services is
being driven by the aging baby boomer generation. The first baby boomers turned 65 in 2011, beginning a prolonged increase of the
senior population. This increase will create a significant pipeline of customers for medical providers, increasing the demand for
hospital stays, outpatient treatments and doctor visits, as well as a greater need for the development of new outpatient facilities.
In addition to the rising age of the baby boomer population, other factors that contribute to the increasing demand for healthcare
services include inadequate hospital infrastructures, advancements in outpatient medical technology, the rising cost of inpatient
procedures, the decentralization of hospitals and their need to preserve
capital and industry regulations and trends focused on reducing healthcare costs.

Healthcare real estate has continued to be a desirable
asset class because of its attractive returns and its inherently stabilizing forces including high barrier to entry markets, strong
credit hospital sponsorship, stable rental growth rates, relatively long-term leases, low vacancy rates, and high tenant retention
rates, all of which contribute to long-term stable property cash flows. In addition, outpatient medical facilities are driven by
need, rather than by speculation and while the industry is not recession-proof, it has shown to be relatively recession-resistant
because of its sound fundamentals and the non-cyclical nature of demand for healthcare services.

Significant Transactions During 2012

Acquisition and Development Activity

During the nine months ended September 30, 2012,
we assisted one of our institutional partners in acquiring a medical office building. We earned an advisory fee upon the closing
of this acquisition and began earning management fees for this asset commencing from the acquisition date.

As part of our healthcare advisory services and
development business, we are co-invested in and managing the following healthcare projects through our development joint venture,
Venture I:

Silver Cross Hospital Medical Services
Building — Construction commenced during October 2010 on this medical services building comprised of approximately
182,000 square feet, referred to as Silver Cross. Construction was completed during the fourth quarter of 2011. In association
with this project, we have also successfully completed and leased our first two timeshare programs that focus on attracting
additional physicians to the facility on a part-time basis to generate additional revenue and to serve as a potential source of
longer-term tenants. The construction loan on this project was refinanced with longer-term debt during the second quarter
of 2012.

Saint Anthony North Medical Pavilion—Construction
commenced during June 2011 on this medical office building and freestanding emergency department comprised of approximately 48,000
square feet. Construction was completed as of September 30, 2012 and building operation commenced during the third quarter of 2012.

Saint Agnes Hospital Medical Office Building—Construction commenced during November 2011 on this medical office building comprised of approximately 85,000 square feet.
Construction is expected to be completed during the fourth quarter of 2012.

During the three months
ended September 30, 2012, we commenced the following projects:

·Three projects at one medical complex for which we provide project management services for
the construction of a new catheterization laboratory, surgery room and electrical service upgrades. Construction is expected to
be completed during the first half of 2013.

Health and Services Ambulatory Care Center – We are providing client consulting services, including strategic planning,
feasibility analysis, site selection, and development and project management services, on a medical office building comprised
of approximately 42,000 square feet. Construction is expected to commence during the fourth quarter of 2012 and be completed
during the first quarter of 2014.

We have also successfully managed
and completed the following development projects:

Rex Healthcare of Knightdale Wellness Center—We completed the original construction of the 63,000 square foot medical office building during the 2008-2009 timeframe. We
later worked with the hospital to strategically locate an adjacent wellness center to complement the client’s orthopedic
and cardiology programs, while developing mutually beneficial relationships between the various healthcare tenants to expand and
fully lease the facility. Construction for this wellness center expansion at the medical office building commenced during September
2011 and includes the addition of 14,500 square feet. Construction of the wellness center was completed during the second quarter
of 2012.

United Health Services Outpatient Medical Facility—Construction commenced during December 2010 on this medical facility comprised of 85,000 square feet for which we provide client
consulting services including strategic planning, feasibility analysis, site selection and project management services. Construction
was completed during the third quarter of 2012.

Critical Accounting Policies

Our discussion and analysis of financial condition
and results of operations is based on our Consolidated Financial Statements which have been prepared in accordance with United
States generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates
and judgments that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements
and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an
ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions. The following discussion pertains to accounting policies management believes are most critical to the portrayal of
our financial condition and results of operations that require management’s most difficult, subjective or complex judgments.

Principles of Consolidation

We consolidate entities deemed to be voting
interest entities if we own a majority of the voting interest. The equity method of accounting is used for investments in non-controlled
affiliates in which we are able to exercise significant influence but not control. We also consolidate any variable interest entities
(“VIEs”) in which we are determined to be the primary beneficiary. As of September 30, 2012 and December 31, 2011,
and for the three and nine months ended September 30, 2012 and 2011, no VIEs were consolidated. We provide for noncontrolling interests
in consolidated subsidiaries for which our ownership is less than 100%.

A VIE is an entity in which either (a)
the equity investment at risk is not sufficient to permit the entity to finance its own activities without additional financial
support or (b) the group of holders of the equity investment at risk lack certain characteristics of a controlling financial interest.
The primary beneficiary is the entity that has the ability to control those activities that most significantly impact the entity’s
economic performance and has the obligation to absorb a majority of the expected losses or the right to receive the majority of
the residual returns. We continually evaluate whether entities in which we have an interest are VIEs and whether we are the primary
beneficiary of any VIEs identified in our analysis. Our ability to correctly assess our influence or control over an entity affects
the presentation of these investments in the Consolidated Financial Statements and, consequently, our financial position and results
of operations.

Fair Value Measurements

Fair value is defined as the exit price or price
at which an asset (in its highest and best use) would be sold or a liability assumed by an informed market participant in a transaction
that is not distressed and is executed in the most advantageous market. Our fair value measurements are based on the assumptions
that market participants would use to price the asset or liability. As a basis for considering market participant assumptions in
fair value measurements, current guidance establishes that a fair value hierarchy exists that distinguishes between market participant
assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified
within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions based
on the best information available under the circumstances (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Level
2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs
that are observable for the asset or liability (other than quoted prices), at commonly quoted intervals. Level 3 inputs are unobservable
inputs for the asset or liability that are typically based on management’s own assumptions, as there is little, if any, related
observable market activity. In instances where the determination of the fair value measurement is based on inputs from different
levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls
is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance
of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset
or liability.

Pre-Development Costs

In accordance with GAAP, as set forth in the Accounting
Standards Codification (“ASC”), we have capitalized certain third-party costs related to prospective development projects
that we consider likely to proceed. If we subsequently determine that the project is no longer likely to proceed or such costs
are not recoverable, any related capitalized costs are expensed and recorded as “Direct costs of revenue” on the Consolidated
Statement of Operations. Upon commencement of the project, any related capitalized costs are submitted for reimbursement from the
owner of the project. These costs include, but are not limited to, legal fees, marketing costs, travel expenses, architectural
and engineering fees, due diligence expenses and other direct costs. We do not capitalize any internal costs as pre-development
costs.

Revenue Recognition

Certain revenue arrangements require management
judgments and estimates. Development fees are recognized over the life of a development project on the percentage-of-completion
method where the circumstances are such that total profit can be estimated with reasonable accuracy and ultimate realization is
reasonably assured. The percentage-of-completion method uses actual hours spent internally on the project compared to the total
forecasted internal hours to be spent on the project as the best measure of progress. If estimates of total hours require adjustment,
the impact on revenue is recognized prospectively in the period of adjustment. As of September 30, 2012 and December 31, 2011,
we recorded an asset of $35,622 and $248,874, respectively, for revenue recognized in excess of billings which represents the difference
between actual billed revenue and the revenue recognized using the percentage-of-completion method. If the estimated percentage
complete was increased or decreased by five percent, development revenue for the nine months ended September 30, 2012 would have
increased by $15,158 or decreased by $60,936.

We source tenants and negotiate leases for buildings
we manage and in return are paid leasing commissions and tenant consulting fees. This revenue is recognized based on each negotiated
contract with the building owner or development contract and is recognized accordingly per the contracts as services are performed
and certain development benchmarks are achieved, unless future contingencies exist.

Property and asset management fees are recognized
monthly as services are performed, unless future obligations exist. Investor advisory and other fees are typically recognized at
the culmination of a transaction such as a purchase or sale of a building.

Certain contractual arrangements for services
provide for the delivery of multiple services. We evaluate revenue recognition for each service to be rendered under these arrangements
using criteria according to GAAP regarding multiple-element arrangements. For services that meet the separability criteria, revenue
is recognized separately. For services that do not meet these criteria, revenue is recognized on a combined basis.

In addition, in regard to development service
contracts, the owner of the property will typically reimburse us for certain expenses that are incurred on behalf of the owner.
We base the treatment of reimbursable expenses for financial reporting purposes upon the fee structure of the underlying contract.
Contracts are accounted for on a net basis when the fee structure is comprised of at least two distinct elements, namely (i) a
fixed management fee and (ii) a separate component that allows for expenses to be billed directly to the client. When accounting
on a net basis, we include the fixed management fee in reported revenue and net the reimbursement against expenses. We base this
accounting on the following factors, which defines us as an agent rather than a principal:

·

The property owner, with ultimate approval rights
relating to the expenditures and bearing all of the economic costs of such expenditures, is determined to be the primary obligor
in the arrangement;

·

Because the property owner is contractually obligated
to fund all operating costs of the property from existing cash flow or direct funding from its building operating account, we bear
little or no credit risk; and

·

We generally earn no margin on the reimbursement
aspect of the arrangement, obtaining reimbursement only for actual costs incurred.

All of our service contracts are accounted for
on a net basis.

Recently Adopted Accounting Pronouncements

In May 2011, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, "Amendments to Achieve Common
Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs" ("ASU No. 2011-04"), which amends current
guidance to result in common fair value measurement and disclosures between accounting principles generally accepted in the United
States and International Financial Reporting Standards. The amendments explain how to measure fair value. They do not require additional
fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial
reporting. ASU No. 2011-04 clarifies the application of certain existing fair value measurement guidance and expands the disclosures
for fair value measurements that are estimated using significant unobservable inputs. The amendments in ASU No. 2011-04 are effective
for interim and annual periods beginning after December 15, 2011. The adoption of the provisions of ASU No. 2011-04 did not have
a material impact on our Consolidated Financial Statements.

In June 2011, the FASB issued ASU No. 2011-05,
"Presentation of Comprehensive Income" ("ASU No. 2011-05"), which improves the comparability, consistency,
and transparency of financial reporting and increases the prominence of items reported in other comprehensive income ("OCI")
by eliminating the option to present components of OCI as part of the statement of changes in stockholders' equity. The amendments
in this standard require that all nonowner changes in stockholders' equity be presented either in a single continuous statement
of comprehensive income or in two separate but consecutive statements. Subsequently in December 2011, the FASB issued ASU No. 2011-12,
"Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other
Comprehensive Income" ("ASU No. 2011-12"), which indefinitely defers the requirement in ASU No. 2011-05 to present
on the face of the financial statements reclassification adjustments for items that are reclassified from OCI to net income in
the statement(s) where the components of net income and the components of OCI are presented. The amendments in these standards
do not change the items that must be reported in OCI, when an item of OCI must be reclassified to net income, or change the option
for an entity to present components of OCI gross or net of the effect of income taxes. The amendments in ASU No. 2011-05 and ASU
No. 2011-12 are effective for interim and annual periods beginning after December 15, 2011 and are to be applied retrospectively.
The adoption of the provisions of ASU No. 2011-05 and ASU No. 2011-12 did not have a material impact on our Consolidated Financial
Statements.

NexCore
Healthcare Capital Corp provides comprehensive healthcare facility solutions to hospitals, healthcare systems and
physician partners across the United States by providing a full spectrum of strategic and operational consulting,
development, acquisition, financing, leasing and asset and property management services within the healthcare industry.
As of September 30, 2012, we managed 22 healthcare facilities and one retail facility comprised of approximately 1.7 million
square feet, and had two construction projects under development comprised of approximately 0.1 million square feet. As of
September 30, 2011, we managed 19 healthcare facilities and one retail facility comprised of approximately 1.3 million square
feet and had four projects under development comprised of approximately 0.3 million square feet.

Summary of the Three Months Ended September
30, 2012 Compared to the Three Months Ended September 30, 2011

For the Three Months Ended September 30,

2012

2011

$ Change

% Change

REVENUE:

Development, facilities consulting and construction management fees

$

2,141,640

$

618,259

$

1,523,381

246.4

%

Leasing commissions and tenant consulting fees

194,134

129,818

64,316

49.5

%

Property and asset management fees

591,608

426,976

164,632

38.6

%

Investor advisory and other fees

131,724

292,125

(160,401

)

(54.9

)%

Total revenue

3,059,106

1,467,178

1,591,928

108.5

%

OPERATING EXPENSES:

Direct costs of revenue

324,635

249,560

75,075

30.1

%

Depreciation and amortization

43,561

39,149

4,412

11.3

%

Selling, general and administrative

1,627,792

1,688,395

(60,603

)

(3.6

)%

Total operating expenses

1,995,988

1,977,104

18,884

1.0

%

Income (loss) from operations

$

1,063,118

$

(509,926

)

$

1,573,044

308.5

%

Revenue

Development, facilities consulting and construction management fees for the three months ended September 30,
2012 increased compared to the same period in 2011 primarily due to revenue earned upon the completion of one of our construction
projects, management fees earned from three small remodel projects and the commencement of one larger development project during
the three months ended September 30, 2012. During the three months ended September 30, 2011, three development projects were ongoing,
and no projects were completed or begun.

Leasing commissions and tenant consulting fees
for the three months ended September 30, 2012 increased compared to the same period in 2011 primarily as a result of steady leasing
activities related to our development projects and our managed properties. We typically recognize 50% of contractual leasing commissions
upon execution of the lease and 50% upon lease commencement. However, for commissions related to development projects, no such
commissions are recognized until commencement of the development project.

Property and asset management fees include asset
management fees, property management fees and maintenance revenue. Such fees increased for the three months ended September 30,
2012 compared to the same period in 2011 primarily due to our management of three additional properties. As of September 30, 2012,
we managed 22 healthcare properties with average occupancy of 94.1% compared to 19 properties with average occupancy of 94.4% as
of September 30, 2011.

Investor advisory and
other fees decreased for the three months ended September 30, 2012 compared to the same period in 2011 primarily due to
an acquisition fee recognized during the three months ended September 30, 2011, as we assisted one of our institutional partners
in acquiring a medical office building. No such acquisition fees were received during the three months ended September 30, 2012.
We earned an advisory fee upon the closing of this acquisition and began earning management fees for this asset commencing on the
acquisition date.

The recognition of certain fees and other revenue
is dependent on specific performance milestones associated with our projects and as a result will tend to fluctuate significantly
from period to period.

Direct costs of revenue represent expenses paid
to third parties for services related to predevelopment, property management, tenant leasing and due diligence, and incremental
internal costs as they are incurred for projects that have commenced. We capitalize all third-party predevelopment costs related
to future projects until a project is no longer probable or construction commences, at which time we are either reimbursed by the
owners of the project or the capitalized costs are expensed.

Direct costs of revenue increased for the
three months ended September 30, 2012 compared to the same period in 2011 primarily due to incrementally
higher internal costs related to the ongoing development projects and increased third-party property management fees.

Expenses related to depreciation and amortization increased for the three months ended September 30, 2012
compared to the three months ended September 30, 2011 primarily as a result of additional computer equipment and software purchased
subsequent to September 30, 2011.

Selling, general and administrative expenses remained
relatively consistent for the three months ended September 30, 2012 compared to the three months ended September 30, 2011. The
slight decrease was primarily related to lower expenses incurred for professional fees partially offset by higher employee costs.

Summary of the Nine Months Ended September
30, 2012 Compared to the Nine Months Ended September 30, 2011

For the Nine Months Ended September 30,

2012

2011

$ Change

% Change

REVENUE:

Development, facilities consulting and construction management fees

$

3,061,238

$

1,747,931

$

1,313,307

75.1

%

Leasing commissions and tenant consulting fees

759,099

620,485

138,614

22.3

%

Property and asset management fees

1,702,584

1,170,669

531,915

45.4

%

Investor advisory and other fees

505,837

636,102

(130,265

)

(20.5

)%

Total revenue

6,028,758

4,175,187

1,853,571

44.4

%

OPERATING EXPENSES:

Direct costs of revenue

818,202

596,642

221,560

38.0

%

Depreciation and amortization

127,325

80,601

46,724

61.8

%

Selling, general and administrative

5,030,770

5,182,202

(151,432

)

(2.9

)%

Total operating expenses

5,976,297

5,859,445

116,852

2.3

%

Income (loss) from operations

$

52,461

$

(1,684,258

)

$

1,736,719

241.4

%

Revenue

Development, facilities consulting and construction management fees for the nine months ended September 30,
2012 increased compared to the same period in 2011 primarily due to revenue earned upon the completion of two of our construction
projects, management fees earned from three small remodel projects and the commencement of one large development project during
the nine months ended September 30, 2012. During the nine months ended September 30, 2011, only one large development project commenced.

Leasing commissions and tenant consulting
fees for the nine months ended September 30, 2012 increased compared to the same period in 2011 primarily as a result of
steady leasing activities related to our development projects and our managed properties. We typically recognize 50% of
contractual leasing commissions upon execution of the lease and 50% upon lease commencement. However, for commissions related
to development projects, no such commissions are recognized until commencement of the development project.

Property and asset management fees include asset
management fees, property management fees and maintenance revenue. Such fees increased for the nine months ended September 30,
2012 compared to the same period in 2011 primarily due to our management of three additional properties. As of September 30, 2012,
we managed 22 healthcare properties with average occupancy of 94.1% compared to 19 properties with average occupancy of 94.4% as
of September 30, 2011.

Investor advisory and other fees decreased
for the nine months ended September 30, 2012 compared to the same period in 2011 primarily due to lower acquisition fees
recognized during the nine months ended September 30, 2012. During the nine months ended September 30, 2012, we assisted one
of our institutional partners in acquiring one medical office building. During the nine months ended September 30, 2011, we
assisted one of our institutional partners in acquiring two medical office buildings. We earned an advisory fee upon the
closing of each of these acquisitions and began earning management fees for these assets commencing on each applicable
acquisition date.

The recognition of certain fees and
other revenue is dependent on specific performance milestones associated with our projects and as a result will also tend to
fluctuate significantly from period to period.

Operating Expenses

Direct costs of revenue represent expenses paid
to third parties for services related to predevelopment, property management, tenant leasing and due diligence, and incremental
internal costs as they are incurred for projects that have commenced. We capitalize all third-party predevelopment costs related
to future projects until a project is no longer probable or construction commences, at which time we are either reimbursed by the
owners of the project or the capitalized costs are expensed.

Direct costs of revenue increased for the
nine months ended September 30, 2012 compared to the same period in 2011 primarily due to incrementally
higher internal costs related to the ongoing development projects and increased third-party property management fees.

Expenses related to depreciation and
amortization increased for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011
primarily as a result of additional tenant improvements completed at our main office and additional computer equipment and
software purchased subsequent to September 30, 2011.

Selling, general and administrative expenses remained
relatively consistent for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. The slight
decrease was primarily related to lower expenses incurred for professional fees partially offset by higher employee costs.

Liquidity and Capital Resources

Cash and cash equivalents were $3,172,077
on September 30, 2012 compared to $1,930,441 on December 31, 2011. The increase in cash and cash equivalents is
primarily related to the receipt of payments from ongoing and completed development projects. Our primary source of liquidity is cash provided by operations.

Cash provided by operating activities improved to $566,061 during the nine months ended September 30, 2012
compared to $2,124,049 used by operations during the nine months ended September 30, 2011, primarily due to operating cash distributions
from our development joint venture which we began receiving during the nine months ended September 30, 2012. Additional operating
cash flows during the nine months ended September 30, 2012 resulted from the decrease in the accounts receivable balance from December
31, 2011 due to collections. These cash inflows were partially offset by the reduction of current payables from December 31, 2011.

During the nine months ended September
30, 2012, cash provided by investing activities primarily related to cash distributions from our development joint
venture, partially offset by the purchase of additional office equipment. During the nine months ended September 30, 2011, we
used $754,524 to invest in our development joint venture and $285,373 for improvements to our Denver office space and the
purchase of additional office equipment. These uses were partially offset by a decrease in our restricted cash.

During the nine months ended September 30, 2012,
we made a distribution to our noncontrolling interest of $9,974. For the nine months ended September 30, 2011, we had no financing
activities.

We intend to meet our liquidity needs from our
available cash and funds provided by operations. We believe that these resources are sufficient to meet our reasonably foreseeable
cash requirements. However, management continues to assess our capital resources in relation to our ability to fund operations
and new investments on an ongoing basis. As such, management may seek to access the capital markets to raise additional capital
through the issuance of additional equity, debt or a combination of both in order to fund our operations and future growth.

To supplement our Consolidated Financial Statements,
we use EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. We define EBITDA as consolidated
net income before interest expense, income tax expense and depreciation and amortization. Our EBITDA includes noncontrolling interests
and may not be comparable to EBITDA reported by other companies. We define Adjusted EBITDA as EBITDA before noncash equity based
compensation expense.

We provide this information as a supplement to
GAAP information to help us and our investors understand the impact of various items on our Consolidated Financial Statements.
We use Adjusted EBITDA as one of several metrics when assessing our performance. In addition, we use Adjusted EBITDA to define
certain performance targets under our compensation programs. Because Adjusted EBITDA excludes items that are included in our Consolidated
Financial Statements, it does not provide a complete measure of our operating performance and should not be used as a substitute
for GAAP measures. Therefore, investors are encouraged to use our Consolidated Financial Statements when evaluating our financial
performance.

The reconciliation of EBITDA and Adjusted
EBITDA to consolidated net income (loss) is set forth in the table below for the three and nine months ended September 30, 2012
and 2011.

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2012

2011

2012

2011

Consolidated net income (loss)

$

1,399,135

$

(509,959

)

$

516,859

$

(1,695,957

)

Exclude: Interest income

(414

)

(151

)

(910

)

(796

)

Exclude: Depreciation and amortization

43,561

39,149

127,325

80,601

Exclude: Income tax provision

—

—

—

—

EBITDA

1,442,282

(470,961

)

643,274

(1,616,152

)

Exclude: Equity-based compensation expense

33,849

26,032

101,477

69,304

Adjusted EBITDA

$

1,476,131

$

(444,929

)

$

744,751

$

(1,546,848

)

In addition to Adjusted EBITDA referenced in the table above, we received $572,510 and $1,221,099 of cash distributions
from our development joint venture during the three and nine months ended September 30, 2012, respectively, versus equity earnings
from this unconsolidated joint venture recognized on a GAAP basis of $335,603 and $463,488 for the three and nine months ended
September 30, 2012, respectively, which is included in consolidated net income (loss). There were no such cash distributions during
2011. We anticipate the receipt of additional cash distributions from our development joint venture on a monthly basis until the
three development assets in which we have co-invested are sold.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

We qualify as a smaller reporting company as defined
in Item 10(f)(1) of SEC Regulation S-K, and are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls
and Procedures. We have established and currently maintain disclosure controls and procedures designed to ensure that
information required to be disclosed by us in our reports filed or submitted under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified by
the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by
this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of
the end of the period covered by this report. In designing and evaluating our disclosure controls and procedures, our management
recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and our management necessarily is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

There were no changes in our internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during our most recent fiscal
quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

There have been no material changes to
the risk factors set forth in Item 1A. to Part I of our Form 10-K, as filed on March 30, 2012, except to the extent factual information
disclosed elsewhere in this Form 10-Q relates to such risk factors.

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